The Bank of Japan's policy-setting panel said Tuesday it won't change its ultraeasy monetary stance, as the country's deflationary trend for consumer prices has not turned around despite the ongoing economic recovery.

The nine-member Policy Board decided unanimously to maintain the target for the outstanding balance of banks' deposits at the BOJ to a range between 30 trillion yen and 35 trillion yen to shore up the recovery trend.

The BOJ will pump greater liquidity into the financial system beyond its target if the market faces a risk of instability, it said.

"Our assessment is that the economy is on a recovery trend," BOJ Gov. Toshihiko Fukui told a news conference. "The recovery is also expected to continue and the positive cycle would likely become clearer."

Despite the economic growth, however, consumer prices -- one of the BOJ's key gauges in mapping out its monetary policy -- remain slightly below year-before levels, and the moderate price decline will likely continue, Fukui said.

The BOJ also maintained its upbeat view on the economy in its monthly report. The August report says, "Japan's economy continues to recover," using roughly the same wording as in the July report.

The report warns, however, of a possible impact on oil prices, which on Monday reached record highs in New York.

Consumer sentiment up

Consumer sentiment in July improved to a 13-year high, reflecting brighter outlooks on prices, employment, income growth and living standards, the government said Tuesday.

The Cabinet Office said the unadjusted consumer confidence index for nationwide households, excluding single-person households, rose 3.8 points from June to 48.7, the highest reading since 49.4 marked in June 1991.